8PG.L Regulatory News (8PG)

19 August 2015

Legendary Investments Plc

("Legendary" or the "Company")

RESULTS FOR THE YEAR ENDED 31 MARCH 2015

EXECUTIVE CHAIRMAN'S STATEMENT

The year under review has been one in which steady progress, with the assistance of Legendary Investments Plc ("Legendary"), has been made at a number of investee companies, including Virtualstock, Bosques and Amedeo. Following the growth fund raise for Virtualstock in April 2014, Virtualstock has been pursuing several large clients including in sectors outside of retail, with positive results manifesting themselves post the year end. Bosques has continued to innovate and now has 18 ha under cultivation and pongamia saplings from fertile seeds from its own pongamia. Amedeo is on track to complete its first rig by the end of this calendar year. While the mining sector continues to be depressed, Sula, Medgold and Oracle continue to pursue their strategies, and discussions regarding Manas continue.

Review of potential investments continued throughout the year, and although one particularly promising opportunity, lying at the nexus of the energy and big data sectors, was pursued, no new investments were made.

Virtualstock Holdings Limited

Virtualstock is a disruptive software company, with a game changing approach that challenges the costly and time-consuming process of traditional systems integration. Utilising agile, open source technology, Virtualstock has developed a unique way for information to flow between any set of fragmented systems, without disruption to any existing IT landscape. Data is seamlessly collated, enriched, mapped and validated, allowing only trusted, reliable information to be deployed. Virtualstock's solutions are a rapid, flexible and scalable alternative to traditional systems integrations. The "integration" market is worth c.US$300-500 billion per year.

In the year under review, Virtualstock built on the landmark progress it made last year, including with Tesco, Office Depot and Kiddicare.com Limited. In April 2014, Virtualstock raised £525,000 of growth funding through an oversubscribed issue of Virtualstock equity. The fundraising placed a post money value on Virtualstock of £25.4 million, which was substantially higher than the valuation of £2.1 million at which Legendary invested in Virtualstock in October 2012. While the fund raising closed in early April 2014, a few days after Legendary's 2014 year end, in line with FRS 26 and the IPEVG, the value of £25.4 million for Virtualstock was used as a reference for the valuation of the Legendary equity and derivative stakes held at the 31 March 2014 balance sheet date, giving the equity and derivative stake a valuation of £1,098,000 and generating for Legendary a substantial (unrealised) profit of £1,045,000. As part of the fund raise, Legendary negotiated further warrants and options over shares of Virtualstock. Warrants were exercised in June 2014 raising Legendary's equity holding in Virtualstock.

As at the year end balance sheet date, 31 March 2015, post the exercise of warrants, Legendary's equity stake in Virtualstock was held on its balance at £1,489,000. Post the year end, Legendary increased its stake in Virtualstock to 7.0%. Accordingly, as at the date of these accounts, Legendary's stake in Virtual stock is valued at £1,790,000.

With growth funding raised, Virtualstock, busied itself servicing existing clients and winning new ones. In May 2014, Virtualstock was accepted on the UK Government's G-Cloud 5 Framework programme which provides central government departments, executive agencies and non-departmental public bodies with an innovative, and efficient way to access and purchase government-approved IT products and services. These efforts yielded results post the year end by way of a first contract with the NHS.

In July 2015, post Legendary's balance sheet date, Virtualstock contracted with a leading NHS Teaching Hospital Trust to deliver cost saving efficiencies within the Trust's supply chain. This first step and entry into the NHS, underlines Virtualstock's cross sector capability. It again demonstrates the ability of Virtualstock solutions to connect any set of fragmented systems, without disruption to any existing IT landscape.

Also in July 2015, Virtualstock announced that it had entered into a contract to supply Virtualstock Edge solutions to Maplin Electronics Limited. Virtualstock first started to work with Maplin mid-2014 piloting Virtualstock Edge with Maplin to implement Virtualstock Drop Ship Solutions to expand Maplin's drop ship supplier base while streamlining order management processes. Virtualstock Drop Ship Solutions have enabled Maplin Electronics to quickly add new suppliers and product ranges to their online offer, as well as providing the functionality to expand existing manufacturer relationships. Maplin Electronics is the UK's leading electronics specialist with its website offering more than 30,000 products and it having 200 stores in the UK and Ireland.

Finally, also in July 2015, Virtualstock, entered into a contract to supply the Virtualstock Edge Order Management System and Drop Ship Solutions to Argos Limited. Argos is the UK's leading digital retailer, offering more than 33,000 products through www.argos.co.uk, its growing mobile channels, stores, over the telephone and uniquely, through Argos TV. Argos is part of Home Retail Group plc, the UK's leading home and general merchandise retailer.

Virtualstock is continuing to service existing clients which include Tesco, Kiddicare, Viking (stationery), Office Depot, Maplin, Argos and a leading NHS Trust. Its pipeline continues to grow and it has high gross margins, typical of companies in the SaaS space.

Virtualstock is in the key space of aggregating and processing data from a variety of sources. Its SaaS solutions are applicable to a wide range of sectors of which retail is only one. Virtualstock is on its way to becoming an industry standard inventory, supply and logistics value chain and data management utility. Critically, its solutions have the ability to connect with otherwise fragmented legacy systems without heavy integrations. With the NHS contract, it has already made its first inroads into a sector outside of the retail sector.

Legendary has proactively supported and assisted Virtualstock to reach this stage during which substantial milestones have been achieved by and substantial value has been added to Virtualstock. Legendary looks forward to continuing to work with Virtualstock to achieve its potential which could well be that of a "unicorn" IT company. Legendary expects further progress in the near to medium term with an attendant crystallisation and realisation of value.

Bosques Energeticos S.A. de C.V.

Bosques continues its grounding breaking and steady progress. Since its establishment in late 2009 and the investment by Legendary, in late 2010, its innovation based modus operandi has scored many "firsts" in Mexico, the region and, potentially, worldwide.

It was the first company to germinate pongamia seeds in Mexico and Central America; it was the first to root successfully pongamia scions in Mexico and the region; and it was the first to have pongamia flowering within two and a half years of planting compared with the normal time of five to six years; and then in less than 2 years in Mexico and the region, and possibly worldwide. It has developed advanced generation four jatropha which commences yielding seeds in as early as six months compared to up to two years for normal jatropha. In addition, its generation four jatropha exhibits multiple branching leading to high yields. Generation four jatropha is also non-toxic as a result of which its cake can and is being used for animal feed (higher value) as well as fertilizer. Bosques was also ahead of others in developing it's inter and mixed multi-crop strategy.

In the year under review, Bosques has continued to develop and innovate. In July 2014, Bosques secured an additional 7 ha of land in the State of Morelos outside of its main test plantation in Puebla where it planted generation four jatropha which are producing up to 4,000 kg of seed per ha.

In March 2015, Bosques's pongamia yielded their first seeds pods. Both Bosque's first generation (4 years old) and second generation (3 years old) pongamia produced seed pods. Typically, pongamia trees take five years to produce pods. Certain of the pods were particularly large being in the region of 7cm long. See: https://www.dropbox.com/s/d61s2kz843dcf3g/G1P%20pods.jpg?dl=0 

The trees producing the best pods were selected to act as the mother trees for an orchard of high yielding third generation pongamia.

Post the year end, in April 2015, Bosques reported that the seeds produced by Bosques pongamia have germinated and are producing saplings. See: https://www.dropbox.com/s/8v3xhnysq1moloz/IMG-20150422-WA0006.jpg?dl=0 

This was yet another landmark first for Bosques in Mexico and the region. Importantly, it demonstrates that Bosques has the ability to scale organically its pongamia. These developments continue to underline how Bosques continues to pioneer the cultivation and development of pongamia and jatropha in Mexico and the region.

Bosques currently has 18 ha under cultivation, 11 ha in Puebla and another 7 ha in Morelos, with 16,000 pongamia trees of which 300 are generation two and 400 are generation three, and 28,000 jatropha plants of which 14,000 are generation four.

Having proven its techniques on its initial 11 ha test plantation and now successful growing generation four jatropha on an additional 7 ha in Morelos, Bosques is continuing discussions on several fronts, including obtaining larger tracks of land on which to plant its cutting edge pongamia and jatropha.

Bosques success has been externally recognised. In December 2014, the leading biofuels journal, "Biofuels Digest" recognised Bosque's progress and success. See http://www.biofuelsdigest.com/bdigest/2014/12/16/a-new-three-legged-platform-for-the-advanced-bioeconomy-the-castor-jatropha-pongamia-strategy/ 

When Bosques was established in 2009, and Legendary first became involved with it in 2010, the biodiesel sector was developing but out of favour due to a number of unsuccessful attempts, primarily with jatropha, to commercialise the sector. The majority of biodiesel was then and is today produced from food crops (primarily palm and soy). As well as being food (and fuelling the "food versus fuel" controversy) these crops are intensive i.e. their cultivation used significant resources. The search from the mid-2000s has been for crops which are not food, do not compete, directly or indirectly, with food, and are not resource intensive.

Bosques with its generation four jatropha and advanced pongamia is at the cutting edge of this search. At the outset Bosques set about taking the lessons from the unsuccessful attempts, the prime lessons being the need for research, development and innovation, the use of sustainable models and the need to invest in land and farm workers. Bosques has patiently developed and innovated its crops to put it at forefront of the sector.

There is increasing pressure worldwide to utilise renewable energy, including biodiesel for both environment and energy security reasons. Over 30 countries around the world have biofuel mandates including in Europe and the U.S. In the EU for instance all forecourt fuel (diesel and petrol) is by law a blend of conventional fuel and biofuel. The "B" number indicates the percentage of biodiesel in the pump diesel, e.g. B20 indicates 20% biodiesel. A number of airlines have and are using blends of bio-jet fuel. In 2012, Aero Mexico flew a commercial flight from Mexico City to Madrid using a blend which contained 30% jatropha derived biofuel. Moreover, a number of militaries, including the US military are using biofuels. The US Navy has been testing biofuel in its fleet and has found that it burns more cleanly than conventional fuel and is therefore better for its engines.

Growth in use of biodiesel over the last several years has been dramatic. From 2000 to 2011, use of conventional oil use grew by 13% from 78 million barrels per day to 88m barrels per day. In the same period, use of biodiesel grew by over 2,500% from 15,000 barrels per day to 404,000 barrels per day. Currently biodiesel represents approximately 1% of total diesel consumption. Growth is expected to continue.

Legendary has a substantial minority stake of 40% in Bosques which it holds on its balance sheet at £83,000, the amount it initially invested. Value crystallisation might be expected in the medium term.

Amedeo Resources PLC

Amedeo's strategy is to invest in the energy and resource infrastructure sectors. To date Amedeo has made two investments: one in an new offshore vessel construction joint venture, Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore") with multi-billion dollar Singaporean listed shipbuilder, Yangzijiang Shipbuilding (Holdings) Ltd; and the other in a ferrous metal and ferrous ore trader, MGR Resources Pte Ltd.

Construction of YZJ Offshore's New Yard commenced in mid-2012 and now the New Yard is fully operational. The New Yard won its first order, for a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up rig ("Explorer 1") in December 2012. Progress continues on the build of Explorer 1 which is nearing completion and is scheduled to be completed in the second half of calendar 2015. The quality of the build is impressive and the build is to schedule. This is key in building the New Yard's reputation as a quality and reliable yard.

The oil price has fallen substantially from January 2014 to now. This has led to a postponement of capital expenditure in the oil and gas sector. Many rigs are underemployed and there is a current oversupply. This is not expected to continue in the medium term. More than half the world's rig fleet is over 25 years old and will require replacing in the medium term.

Further, demand for rigs is expected to be for more advanced and localised rigs. The New Yard is able to meet this demand. It is also able to construct a variety of other vessels. While completing Explorer 1 and waiting for further orders, the New Yard is building blocks for container ships. The New Yard is in continuous discussions with respect to obtaining further vessel orders.

With respect to MGR, the price of iron ore has fallen substantially from January 2014 to now. This has eroded margins in the iron ore brokering business. MGR has nonetheless remained marginally profitable and has made interest payments to Amedeo. With no immediate recovery in the price of iron ore expected, MGR is exploring opportunities in broking other commodities.

While, due to a low oil price and falling commodity prices, progress at Amedeo has been slower than expected, as well as seeking new orders for the New Yard and MGR exploring opportunities in broking a range of commodities, Amedeo also continues exploring additional investments in the resource and resource infrastructure sectors.

As at the balance sheet date Legendary's stake in Amedeo was valued at £64,000.

Other Investments

Manas Minerals LLC

In 2012, Legendary invested £100,000 into Kyrgyzstan based Manas. Manas owns the Padsha Ata Licence to mine for coal in the Asksy region of Jalal-Abad. Soviet surveys suggest that the region contains 182 million tonnes of coal reserves. Since the investment, various reports have been produced on the Manas coal formation which indicate that it is more intense and thicker than suggested by the Soviet era studies. Various discussions are ongoing with respect to realising the investment which is held at £100,000 on the balance sheet.

Sula Iron and Gold PLC

In July 2012, Legendary invested £50,000 in a convertible loan note in a pre-IPO funding round for Sula. In October 2012, Sula was admitted to trading on AIM, and Legendary invested another £50,000 for further shares. Sula is a multi-commodity exploration company focused on Sierra Leone and sub-Saharan Africa.

Sula continues to progress its strategy. In December 2014, Sula declared its maiden JORC Compliant Mineral Resource Estimate for its Ferensola licence on its iron ore comprising a total resource of 514.5 million tonnes at 31.8% Fe. In addition, further exploration targets were identified which could increase this by a further 200Mt. In February 2015, leading industry consultants, SRK ES, increased their technical valuation of Sula's Ferensola licence from $31.7m in January 2014 to $56.0m, with a maximum potential value of $210.0 million. In addition, 5 trenches in the gold exploration programme have been completed and high levels of Coltan have been identified. Sula's next phase of exploration is anticipated to be JORC Compliant MRE on its gold targets. Legendary continues to hold its stake in Sula which as at the balance sheet date was valued at £22,000.

Medgold Resources Corp.

Medgold is a TSX-V listed gold exploration licence and project development company with a particular focus on Italy, Spain and Portugal. In July 2011, Legendary invested £50,000 in Medgold Resources Limited, which listed in December 2012 on the TSX-V in Canada thereby becoming Medgold Resources Corp. Medgold aims to become a leading Europe-focussed gold explorer and developer focussing primarily on Portugal. Medgold has two principal assets: Lagares, a joint venture with Centerra Gold Inc.; and Boticas, a wholly owned 106 sq km licence. Legendary continues to hold Medgold. Should Medgold achieve its targets, its value may rise substantially. As at the balance sheet date, the market value of Legendary's shares in Medgold was £16,000.

Oracle Coalfields PLC

Oracle is a coal developer whose primary asset is the Thar Coalfield Block VI licence area located in the Sindh Province, south-eastern Pakistan, a 1.4 billion tonnes resource with 529 million tonnes JORC mineral resource and 113 million tonnes JORC proven reserves within the mining area of the licence. Oracle is in the process of developing the resource in collaboration with partners, including a Chinese consortium. Should it succeed in this, its value should rise substantially.

The stake in Oracle was acquired with the proceeds of the disposal of Legendary's stake Regency Mines PLC. Regency is a nickel, cobalt, gold, flake graphite and base metals exploration and development company. Legendary had invested £50,000 in Regency in 2012. Regency has not performed as expected, as a result of this, Legendary made a decision to exit Regency. This process was completed in June 2014, and the proceeds were invested into Oracle. As at the balance sheet date, the market value of Legendary's shares in Oracle was £10,000.

Financial Review

During the year, Legendary made a net loss on investments of £235,000 (2014 gain: £1,119,000). This was due to the losses on the listed investments: Amedeo, Sula, and Oracle and Medgold. While the losses were disappointing, as discussed above, Legendary continues to hold these investments, and believes that should they fulfil their potential, gains might be substantial and asymmetric. The unlisted investments continue to be held at last year's levels.

Administrative costs were £231,000 (2014: £214,000). The Company has a policy of keeping administrative costs as low as practicable, aligning directors' interests with shareholders' interests and keeping cash remuneration for directors at low levels unless profitable realisations of investments are made. Each Director received £1,200, a total of £2,400 (2014: £2,400) of cash remuneration. 100,000,000 (2014: 180,000,000) out of the money options with an exercise price of 0.2 pence and ten year life were granted to the Directors. The share based payments accounted for £25,000 (2014: £48,000) of the £231,000 (2014: £214,000) of administrative costs, leaving cash administrative costs of £206,000 (2014: £166,000).

Cash administrative costs of £206,000 (2014: £166,000) increased due to activity at Legendary, both in assisting its investee companies and in assessing further investments. In particularly, an investment in a company at the nexus of energy and big data reached documentation stage, but the deal did not close. In addition, professional fees rose as additional advisers were taken on board and there were increases in existing adviser fees.

The operating loss was £466,000 (2014 profit: £905,000). There were £4,000 of finance charges (2014: £4,000) due to a loan of US$250,000 which was repaid in August 2014 (see note 22). The loss before taxation for the year was £470,000 (2014 profit: £901,000).

As at the year end, Legendary's investments (fixed asset investments and current asset investments) were recorded at £1,785,000 (2014: £1,628,000). While, as noted above, the value of the listed investments fell, the cause of the rise was the exercise of various options over shares in Virtualstock for £392,000.

Debtors due within one year were £2,000 (2014: 39,000). This fall was due to a loan made to Virtualstock being converted to equity by way of exercise of an option.

Cash amounted £196,000 (2014: £63,000) (including £1,000 (2014: £nil) in the client account of the Company's accountants).

As at the year end, creditors falling due within one year fell to £50,000 (2014: £199,000). This was primarily due to Legendary paying back a short term loan of US$250,000 (as noted above).

Overall, net and total assets for the year were £1,906,000 (2014: £1,503,000) an increase of 27%, and £1,986,000 (2014: £1,732,000), an increase of 15%, respectively.

In May 2014, Legendary raised £900,000 (before expenses), by way of a placing of 818,181,817 ordinary shares of 0.10 pence nominal value each at a price of 0.11 pence per new ordinary share. The shares were placed with a range of institutional and private investors. Zafar Karim subscribed for 22,727,273 new ordinary Shares for £25,000 at the placing price. Zafar Karim's resultant interest in the Company was 55,727,273 ordinary shares, representing 2.3% of the Company's share capital as enlarged by the placing. Following admission of the new ordinary shares, the Company's enlarged issued share capital was 2,461,530,833 ordinary shares.

As at 11 August 2015, Legendary had cash and listed investments of £189,000.

Miscellaneous

In March 2015, Peterhouse Corporate Finance Limited was appointed as joint broker.

On 18 May 2015, post the balance sheet date, the Company entered into a loan facility agreement with Alcazar 1 Pte for US$250,000 for working capital purposes, having repaid a similar loan in August 2014. The loan bears an interest rate of 10% and is repayable in May 2016. Should the Company fail to repay the loan then the debt will be converted to equity in the Company at the prevailing market price at that date. Following the placing in May 2014, Alcazar 1 Pte is interested in 11.1%. of Legendary so the loan falls to be treated as a related party transaction under AIM Rule 13. The directors consider, having consulted with the Company's nominated adviser, the terms of the August 2014 loan repayment and the new loan to be fair and reasonable insofar as the Company's shareholders are concerned.

Outlook

The year under review has been one in which steady progress has been made at the key investee companies. Bosques continues its ground breaking work, cultivating its generation four jatropha at two locations and its second generation pongamia seeds producing fertile seeds to produce third generation pongamia. Amedeo is on track to deliver a completed rig by the end of this calendar year. In the case of Virtualstock, progress has manifested itself post the year end.

These results vindicate Legendary's proactive investment strategy. Further investments were considered, and one in particular which lay at the nexus of the energy and big data sectors was pursed to an advanced stage. No investments were, however, made.

The Board looks forward to continuing to add value to its investee companies, crystallising and realising value in existing investments, and making further investments as appropriate.

Extracts of the audited results appear below and a full version will be available on the Company's website www.legendaryinvestments.co.uk

- Ends -

For further information, please contact:

About Legendary Investments Plc

Legendary Investments Plc is a proactive investment company that focuses on making investments in and assisting companies which exhibit the potential to generate returns of many multiples through capital appreciation. Typically, Legendary invests in small companies where there are clear catalysts for value appreciation and the companies are operating in sectors exhibiting long term growth. Examples of such sectors include technology, energy and natural resources.

For more information, visit www.leginvest.com

A separate statement of recognised gains and losses has not been prepared as the Company has no recognised gains or losses in the current or prior period other than the gains noted above.

All activities derive from continuing operations.

Accounting Policies

Basis of accounting

The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention, modified by the revaluation of investments.

Impairment of asset values

Tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable or as otherwise required by relevant accounting standards.

Investments and financial instruments

Investments, financial assets and financial liabilities are recognised on the Company's balance sheet when the Company has become a party to the contractual provisions of the instrument.

Fixed asset investments include investments in investee companies where the time horizon for realisation of the investment is considered to be longer than one year. Investments in investee companies where the time horizon for realisation of the investment is considered to be less than one year are classified as current assets.

All investments have been designated as fair value through profit or loss, and are initially measured at cost which is the best estimate of fair value. Thereafter, the investments are measured at subsequent balance sheet dates at fair value. A financial asset is designated in this category if it is acquired to be managed and its performance is evaluated on a fair value basis with a view to selling after a period of time. Listed investments and investments traded on AIM or overseas stock exchanges are stated at current price at the balance sheet date provided the market is active. Unlisted investments are stated at directors' valuation with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEVG") and in accordance with FRS26 "Financial Instruments: Measurement":

Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at the price of recent investment except where the company's performance against plan is significantly different from expectations on which the investment was made in which case a different valuation methodology will be adopted.

Any realised and unrealised gains or losses on investments are taken to the profit and loss account.

Financial instruments

Debtors

Debtors are classified as loans and receivables and are initially recognised at fair value. They are subsequently measured at their amortised cost using the effective interest method less any provision for impairment. 

Cash at bank and in hand

Cash at bank and in hand includes short-term deposits with maturities of less than three months.

Trade creditors

Trade creditors are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

Loans

Loans are initially recognised at fair value and subsequently at amortised cost.

Equity instruments

Issued equity instruments are recorded at fair value on initial recognition net of transaction costs.

Tangible fixed assets

All tangible fixed assets are recorded at cost less accumulated depreciation and impairment losses. Depreciation is computed to write off the cost of an asset, less its estimated residual value, over the useful economic life the asset as follows:

Computer Equipment - 25% straight line

Deferred taxation

Deferred tax is recognised in respect of timing differences between the Company's taxable profits and its results as stated in the financial statements that have originated but not reversed at the balance sheet date.

Deferred tax assets are only recognised where there is an expectation that they will result in a reduction in corporation tax payments in the foreseeable future.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the accounting date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

Going concern

The Company's business activities, together with the financial position of the Company and the factors likely to affect its future development, performance and position are set out in the Executive Chairman's Statement.

For the year under review, the Company had administrative costs, excluding non-cash items, of £206,000, and in the previous year, the Company had administrative costs, excluding non-cash items, of £166,000. The Board takes steps to ensure that administrative costs (which comprise virtually the entire cash costs of the Company) are kept as low as practically possible.

As at 11 August 2015, the Company had £189,000 of cash and £121,000 of listed investments. The listed investments may be realised for cash at short notice. Together, this gives Legendary, liquid resources of £310,000. Within the next 12 months, a loan of US$250,000 with interest at 10% per annum has to be repaid. The loan is from the largest shareholder and may be settled in shares of the company.

On the basis of the above, the Directors believe that sufficient funds will be available to support the going concern status of the Company over the next 12 months following the approval of these financial statements. Consequently, the Directors believe that it is appropriate to prepare the Company's financial statements on a going concern basis. This assumes that the Company is to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. 

Share based payments

The Company issues equity-settled share based payments to certain employees in the form of options and warrants. A fair value for the equity-settled share awards is measured at the date of the grant. The fair value is measured using the Black Scholes method of valuation, which is considered to be the most appropriate valuation technique. The valuation takes into account factors such as non-transferability, exercise restrictions and behavioural considerations.

An expense is recognised to spread the fair value of each award over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will actually vest. The estimate of vesting is reviewed annually, with any impact on the cumulative charge being recognised immediately.

Amounts to be settled in shares are presented within equity, representing the expected time-apportioned fair value of the awards that are expected to vest.

Exceptional items policy

Material items which derive from events or transactions that fall within the ordinary activities of the reporting entity have been disclosed as exceptional where individually or, if of a similar type, in aggregate, their size or incidence requires separate disclosure if the financial statements are to give a true and fair view.

The Company only has one class of business and only operates within the United Kingdom.

Other than the gross directors' fees of £2,400 (2014: £2,400) accrued in the year there were no staff costs paid during the year (2014: £nil). The Company did not incur any social security costs in relation to the fees. With respect to directors' share based payments, see note 14. The directors' fee remained unpaid as at the year end date.

As at 31 March 2015 the Company had losses of approximately £5.7m (2014: £5.2m) available to carry forward against future income. A deferred tax asset of £1.1m (2014: £1.2m) is not recognised in respect of these losses due to the uncertainty as to the utilisation of the losses in the foreseeable future.

Future tax charges will be dependent on the split of profits for tax purposes as between revenue and capital items, and the utilisation of losses incurred to date.

The average number of undiluted shares in issue during the year was 2,322,440,752. The fully diluted number of shares in issue during the year was 3,087,440,752

During the year, options with various exercise prices over 225,683 shares in Virtualstock Holdings Limited were exercised for £392,000.

7 FIXED ASSET INVESTMENTS (continued)

The Company holds more than 20% of the equity (and no other share or loan capital) of the following undertakings:-

Bosques Energeticos EBE S.A. de C.V. in which the Company has more than 20% interest, is not treated as an associated undertaking.

All investments in investee companies are regarded as simple investments for the purposes of FRS9 as all investments made are with the aim of realising capital gain on the investment, which may take less than or more than one year, and the Company does not have on-going participating interests or significant influence in the investments.

All investments are measured at fair value through profit and loss as detailed in the accounting policy.

Other debtors include £1,000 (2014: £nil) of cash balances held in the client account of the Company's accountant.

Trade creditors, other creditors and accruals represent the Company's financial liabilities measured at amortised cost. Due to their short term nature, carrying value approximates to fair value.

Accruals include a balance of £9,000 (2014: £nil) related to travel and other expenses that the Directors incurred in relation to ordinary activities of the Company. These amounts remain outstanding as at the balance sheet date.

Accruals also includes amounts owed to Directors £2,400 (2014: £2,400) which were outstanding at the balance sheet date.

£30,000 was raised in August 2010 by way of a loan facility. The facility bears no interest and has no fixed date for repayment. The loan is not expected to be paid in the foreseeable future and therefore has been classified as due in more than one year as the Directors believe this most appropriately reflects the period over which the loan will be repaid.

In May 2014, Legendary raised £900,000 (before expenses), by way of a placing of 818,181,817 ordinary shares of 0.10 pence nominal value each at a price of 0.11 pence per new ordinary share. The shares were placed with a range of institutional and private investors. Zafar Karim subscribed for 22,727,273 new ordinary Shares for £25,000 at the placing price. Zafar Karim's resultant interest in the Company was 55,727,273 ordinary shares, representing 2.3% of the Company's share capital as enlarged by the placing. Following admission of the new ordinary shares, the Company's enlarged issued share capital was 2,461,530,833 ordinary shares.

14 SHARE BASED PAYMENT

Share Options

The Company has unapproved and approved share option schemes in which the directors participate.

Under the Company's approved share option plan, the Company grants options and shares to certain directors and employees of the Company. If the options remain unexercised for a period of 10 years from the date of grant, the options lapse. The options are exercisable immediately on grant.

Details of Directors' outstanding share options as at the year ended are shown below.

Movements in ordinary share options outstanding

All options were exercisable at the end of the year.

14 SHARE BASED PAYMENT (continued)

Fair value

The fair value of the options is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on implied volatilities as determined by simple average of a sample of listed companies base in similar sectors. The risk free rate for the period within the contractual life of the option is based on the UK gilt yield curve at the time of the grant.

The share based payment charged for the year was £25,000 (2014: £48,000). This is included in administrative expenses within the profit and loss account.

Warrants

Other than the employee share options set out above, warrants have been granted with exercise prices and dates shown in the table below.

(1) Post the year end, 250,000,000 of the warrants had their life extended by 2 years to 4 August 2017 in exchange for not asking for repayment of the long term loans of £30,000 made on 5 August 2010. The loans bear no interest and have no repayment terms.

14 SHARE BASED PAYMENT (continued)

Movements in warrants outstanding

The fair value of warrants granted in the year was £1,000 (2014: £nil).

The fair value of the warrants is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

Other Information

The market price of the Company's ordinary shares ranged from a high of 0.15p to a low of 0.08p during the year.

Fixed asset investments have been excluded in both periods to reflect more properly that these are not liquid resources.

20 FINANCIAL INSTRUMENTS

Loans and receivables

Loans and receivables include cash at bank and in hand and other debtors. Financial liabilities at amortised cost include trade creditors, accruals and loans.

Borrowing facilities

At the year end the Company had no overdraft or other borrowing facilities (2014: £nil).

20 FINANCIAL INSTRUMENTS (continued)

Capital Management

The Company is financed primarily with equity capital, which is then utilised to meet operating expenses and make investments. Investments are financed primarily from equity capital, though debt may be utilised where it is felt that it is prudent to do so.

Interest rate risk

The Company does not have exposure to interest rate.

The Company had a loan at a fixed interest rate of 10% paid in two half yearly instalments. The interest rate is fixed for the term of the loan. The loan was repaid in August 2014.

Post the balance sheet date, in May 2015, the Company took out a loan at a fixed interest rate of 10% paid in two half yearly instalments. The interest rate is fixed for the term of the loan.

The Company held £196,000 of cash as at the year end date, of which £1,000 was held in a client account with the company accountants.

Currency risk

The Company makes investments in both UK and foreign companies. In addition, the companies in which the Company invests may or may not have exposure to foreign currency exposure. In this regard the Company has foreign currency exposure. Currency exposure is one the factors considered when making investments, and as such it is implicitly managed at the point of investment.

In addition, the Company has a loan denominated in US$ and is therefore exposed to the risk of £Sterling depreciating against the US$.

Liquidity risk

The Company makes investments in unlisted and listed entities. Consequently the Company is exposed to the liquidity risk to the extent that it may not be able to find buyers for its unlisted investments and liquidity in its listed investments may be low. Therefore there can be no certainty that the Company would be able to exit its investments.

Market risk

The Company monitors the value of its investments on a regular basis, and takes action to decrease or dispose of investments when it deems appropriate.

Credit risk

The bank account of the Company and of the client account held by PSB Accountants Limited is held with well-established financial institutions of high quality credit standing.

Fair value hierarchy

Fair values have been measured at the end of the reporting period as follows -

All fixed asset investments are classified as Level 2 or Level 3. The movement on Level 2 and Level 3 assets are disclosed in note 7.

Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used making the fair value measurements, as follows -

20 FINANCIAL INSTRUMENTS (continued)

• Level 1 - Unadjusted quoted prices in active markets for identical asset or liabilities ('quoted prices'),

• Level 2 - Inputs (other than quoted prices in active markets for identical assets or liabilities) that are directly or indirectly observable for the asset or liability ('observable inputs'), or

• Level 3 - Inputs that are not based on observable market data ('unobservable inputs')

The Level 2 and Level 3 investments have been valued at the price of recent investment, net asset value or discounted cash flow based on post period end redemptions in line with the Company's accounting policies and IPEVG guidelines.

21 POST BALANCE SHEET EVENTS

In April 2015, the Company increased its stake in Virtualstock to 7.0%.

In May 2015, the Company obtained a loan of US$250,000 from Alcazar 1 Pte Limited, which holds 272,727,273 shares (11.1% stake) in the Company. The loan has an interest rate of 10% per annum and is repayable in May 2016. The loan is secured on shares in the Company valued at the market price of the shares at the time when the loan becomes repayable.

The loan from Alcazar 1 Pte Limited has been treated under related party provisions by virtue of Alcazar 1 Pte Limited's 11.1% stake in Legendary shares.

22 RELATED PARTY TRANSACTIONS

In August 2014, the Company fully repaid the loan of US$250,000 from Alcazar 1 Pte Limited which was drawn in December 2013. At the time the loan was drawn, Alcazar 1 Pte Limited had no relationship with Legendary. At the time of its repayment, Alcazar 1 Pte Limited held an 11.1% stake in the Company and is therefore a related party.

No other related party transactions were undertaken during the year other than those disclosed above.

Statement by the directors

The preliminary results for the year ended 31 March 2015 and the results for the year ended 31 March 2014 are prepared under UK GAAP. The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 March 2015.

The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 March 2015 or 31 March 2014. The financial information for the year ended 31 March 2014 is derived from the Annual Report delivered to the Registrar of Companies. The Annual Report for 2015 will be delivered to the Registrar of Companies in due course. The auditors' report on those accounts was unqualified and neither drew attention to any matters by way of emphasis nor contained a statement under either section 498(2) of Companies Act 2006 (accounting records or returns inadequate or accounts not agreeing with records and returns), or section 498(3) of Companies Act 2006 (failure to obtain necessary information and explanations).

The Board of Legendary Investments Plc approved the release of this audited preliminary announcement on 18 August 2015.

The Annual Report for the year ended 31 March 2015 will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company. The report will also be available on the investor relations page of our web site (www.leginvest.com). Further copies will be available on request and free of charge from the Company Secretary at Legendary Investments Plc, 6th Floor, 25 Farringdon Street, London EC4A 4AB.